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Posted at 7:45 AM ET, 02/27/2011

Morning Bits

By Jennifer Rubin

Democrats begin to cave on spending cuts. "The outlines of a plan to avoid a possible government shutdown began to emerge Friday evening, as Democrats reacted with cautious optimism to a Republican proposal to delay discussion of some of the most contentious budget cuts demanded by GOP lawmakers in the House." Remember, if Senate Republicans didn't hold the line against the omnibus spending bill in the lame-duck session, we wouldn't be cutting spending now.

Some very smart people are flops as presidential candidates. "Mitch Daniels on Friday said he was 'gratified' by New York Times columnist David Brooks's piece urging him to run for president and conceded he is still thinking about it, but added there other ways to take part in the national conversation besides 'throwing yourself off that cliff.'" You can't accuse him of pandering to potential primary voters. Or even wooing them.

No wonder Daniels has bombed with movement conservatives. "Gee. Will Republican governors follow Mitch Daniels's lead? Or Chris Christie's. Mitch Daniels's first official act when elected governor was to call for increasing the personal income tax in the state. Then he wanted other tax hikes. More recently he has suggested that a value-added tax would be a fine addition to the federal income tax. And he praised a national energy tax ... an oil import fee. An oil import fee is a national energy tax on training wheels. This is a model of what not to do as governor."

People forget that Mike Huckabee was a bust outside of the Christian-conservative slice of the Republican electorate.

Egyptians say Obama was too timid during the revolution. Secretary of State Hillary Clinton's denials go over like a lead balloon. The Obama team is so used to hearing its own spin, it is no doubt genuinely shocked when those outside the Kool Aid splash zone don't buy it. (Recall Obama's howler: "History will end up recording that at every juncture in the situation in Egypt, that we were on the right side of history") )

If the test is whether Iran's nuclear program has been slowed, sanctions have flunked. "The U.N. atomic watchdog has received new information regarding allegations that Iran may be seeking to develop a nuclear-armed missile, the agency said in a report voicing deepening concern about the issue. The confidential document from the International Atomic Energy Agency (IAEA) signalled growing frustration at what it sees as Iran's lack of cooperation with a long-running investigation into its disputed nuclear programme."

If the economic "recovery" petering out already? "The nation's economy grew less quickly at the end of 2010 than previously estimated, the Commerce Department reported Friday. The nation's gross domestic product grew just 2.8 percent in the fourth quarter of 2010, according to the new report."

By Jennifer Rubin  | February 27, 2011; 7:45 AM ET
Categories:  Morning Bits  
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I love your writing, and agree with you most of the time, but when it comes to Governor Daniels I think your way off the mark. Americans need to pay for their excesses. I would love to cut every program and eliminate as much government as it takes to balance the budget. That is not going to happen any time soon. Until that time comes, we as Americans, and this includes the middle class, the poor, and the rich, need to start paying for the bloated, inefficient, dysfunctional, federal government. Maybe then Americans will realize this size government is undesirable and unsustainable.

Posted by: lewisdapa | February 27, 2011 9:03 AM | Report abuse

It is possible we could slip back into recession if the budget cuts are big enough and the tax cuts are too small. The focus on the debt/deficit is a mistake. As someone once said: "Deficits don't matter" - either politically OR economically. What matters is inflation, and the primary determinant of inflation currently is the price of oil (it also greatly impacts the production and price of food) - which as the swing producer makes Saudi Arabia a linchpin of the world economy. Even though we went off the gold standard in 1971, we still use gold standard mechanisms when in truth deficits are irrelevant to a free floating sovereign currency. Inflation is important but with so much slack in the economy it is far from being a problem from a currency standpoint. Inflation from oil pricing is something different, and the restriction of production in this country doesn't help.

Posted by: vausa22923 | February 27, 2011 9:04 AM | Report abuse


You say that "this size government is undesirable and unsustainable." Unfortunately, it can be sustained for a very long time as Japan has shown. Our recent economic policies most resemble Japan's, and Japan is still functioning with debt at 220% of GDP. At a debt level of only 100% of GDP, I am afraid that America has a very long way to go until the ultimate crisis. Till then review the economic results in Japan for the last 25 years to get an idea of what America will look like in the near term.

Posted by: Inagua1 | February 27, 2011 9:36 AM | Report abuse

Jen you are losing the forrest for the trees with Daniels and Christie. Another Daniels' first acts as governor was an Executive Order ending collective bargaining for state workers --more radical than Christie. And when he leaves office next year, Indiana will be in far better fiscal condition than NJ will be at the end of Christie's term.

Both Daniels and Christie are great governors and either could be a very good conservative President. And they like each other. Good chance that Christie would endorse Daniels if he runs in 2012. If Daniels never runs, easy to see him endorsing Christie in 2016.

Waste of time trying to drive a wedge between them.

Posted by: EricR1 | February 27, 2011 9:38 AM | Report abuse

Ms. Rubin, NO ONE should be quoting Grover Norquist on anything.
Gov. Daniels lowered property tax rates far more than the cumulative effect of his other tax increases. He even managed to say that in detail on PBS Friday night.

Does credibility mean nothing to you? Come on, admit it - you are wary of Daniels' part-Syrian (Christian) ancestry.

Posted by: K2K2 | February 27, 2011 11:56 AM | Report abuse

Keep on hammering Daniels. I like him but he will never be president because, while he understands the perils of the debt and our precarious present position, he is one dimensional: balance the books. Nice, and important, but a one-trick pony like this is little more than a back room accountant, not a leader of a national political movement.

Posted by: gord2 | February 27, 2011 12:01 PM | Report abuse

Hey Obama's recovery is still doing better than the ones in the UK and Germany, that conservatives have been pimping. That is why they want to cut spending; they want the economy right back down the tubes, where Bush left in '08, so they have a better chance to win in '12. Not gonna happen though, if spend all your time arguing who is the real conservative.

Posted by: oldabandonedbeachhouse | February 27, 2011 12:10 PM | Report abuse

Posted by: oldabandonedbeachhouse (1) Ignore oldabandonedbeachhouse

Hey Obama's recovery is still doing better than the ones in the UK and Germany, that conservatives have been pimping. That is why they want to cut spending; they want the economy right back down the tubes, where Bush left in '08, so they have a better chance to win in '12. Not gonna happen though, if spend all your time arguing who is the real conservative.

Um, no. Conservatives believe that government spending crowds out private investment dollars and acts as a drag on the economy. If conservatives truly wanted to sabotage the economy, they would have let Obama raise taxes and increase spending. If conservatives believed Keysian pump priming was the way to jump start the economy they would be liberals.

Posted by: sold2u | February 27, 2011 1:04 PM | Report abuse

Well sold2u they've stepped aside in the UK and Germany, and you have the results of you conservative philosophy. But I guess little or no growth is a result conservatives think is satisfactory.

Posted by: eerock | February 27, 2011 1:47 PM | Report abuse

IAEA Confirms Iran Nuclear Program for Energy Not Weapons
The report issued Friday confirms that Iran’s nuclear activities are for a peaceful energy program, not weapons creation
BY: John Shimkus | Sat Feb 26, 2011

For years now, the world has been breathing down the neck of Iran, believing their nuclear and uranium enrichment programs were just a cover up for some secret nuclear weapons development agenda. However, the International Atomic Energy Agency (IAEA) released a report Friday confirming that Iran’s nuclear intentions are peaceful, and that their research and development of nuclear technologies has been strictly toward energy generation.

However, the IAEA has informed Iran’s powers at be that they still must comply with the four UN security council resolutions to halt their uranium enrichment programs. Iran’s ambassador to the IAEA, Ali Asghar Soltanieh, states that the resolutions are unfounded now that Iran has proven their nuclear program to be peaceful. “When all nuclear activities are accounted for and there is no diversion to military purposes… then what is the justification for referring to an old obsolete request of suspension,” he said.

Under the Nuclear Non-Proliferation Treaty, it is fully stated that the United Nations and member states with nuclear capabilities are encouraged to assist other countries with their own peaceful nuclear energy programs. Yet, the United Nations Security Council seems to be defying the treaty by denying Iran the ability to enrich uranium. What’s more, the UN resolutions calling for the end of Iran’s nuclear program also demand the country stop processing Plutonium, which is odd considering the IAEA report reveals that plutonium processing is not even taking place in Iran.

The implications of this new IAEA report are staggering. Since the media’s involvement in the Iran nuclear program began, fears have spread about a possible armed conflict brewing between Iran and the United States and other UN nations for the country’s noncompliance with UN mandates. Have these fears been unfounded? Is the worldwide perception of Iran as some rogue state with the worst of intentions just a myth propounded by media propaganda? It’s starting to look that way. It’s a good thing this report came out when it did. All we need is for the U.S. and its allies to start busting down the doors of Iran to start yet another conflict that it can’t afford and is based on a complete lie. Nonetheless, the IAEA and the UN still have their suspicions in regard to the military applications of Iran’s uranium enrichment program, and although the country passed the IAEA’s inspection for nuclear energy generation, the agency is still seeking transparency in Iran’s military activities.

Posted by: let_freedom_ring_in_egypt | February 27, 2011 1:51 PM | Report abuse

The UK and Germany may have made small, largely symbolic steps to reduce the size of government, but they are nowhere near laissez faire economies. If they keep going in the right direction, their economies should keep improving.

And look, when the government is highly involved in the economy, it acts as a dampener on economic activity, creating this sort of "muddling through" unsatisfying economy. The lows are not as low but the highs are not as high. Yes, Germany may have lower unemployment than we do *right now*, but prior to that we have outperformed Germany for a quarter century in our unemployment rate.

The record of Keynsian economics is dreadful, and all the liberal revisionist history Krugmans in the world won't change that.

Posted by: sold2u | February 27, 2011 2:03 PM | Report abuse

vausa22923 -
Deficits don’t matter as long as it looks like you have the growth, resources, and resolve to pay the interest. Ask the PIIGS (Portugal, Italy, Ireland, Greece; and Spain); we are close to joining their club.

As for those who want tax increases right now: bad idea, you’ll make 2010 look like a booming year.

There’s another reason not to raise any taxes besides stifling growth: politicians will spend more than whatever they can tax, so let’s change those expectations. Conservatives want to starve the beast that Leviathan has become and get the economy booming, Americans working, and folks trading. You want to enrich the middle class? Set the economy free and stand aside.

Have you seen the item about one unintended consequence of banning earmarks? When an appropriator puts a member’s measly $1M earmark into a highway, farm, or other humongous bill, he’s guaranteed of getting that member’s vote. Take away earmarks and the members are free to evaluate the whole bill on the merits, turning a sure vote into a questionable one.

And sure enough, GOP legislators are finding that it’s a heckuva lot easier to get members to trim budgets now because they’ve no earmarks, no bacon for the folks back home, no personal little bribelet to guard. And a lot of the folks back home are happy about that too.

Posted by: SCMike1 | February 27, 2011 2:54 PM | Report abuse

The so-called PIIGS have given up their sovereign currencies for the Euro so their situation is analogous to our states not to sovereign currencies like the dollar , pound, or yen which are controlled by a national bank. Without control of the currency, their only choice is austerity. Not so for a sovereign currency.

Posted by: vausa22923 | February 27, 2011 3:22 PM | Report abuse

It sounds like Sold2U is unaware of the historical data showing that the economy performs much better under Democrats than Republicans. Willful ignorance is not attractive quality, even on the internet.

Posted by: eerock | February 27, 2011 3:36 PM | Report abuse

Posted by: eerock (2) Ignore eerock

It sounds like Sold2U is unaware of the historical data showing that the economy performs much better under Democrats than Republicans. Willful ignorance is not attractive quality, even on the internet.

Well, inserting yourself into a conversation you don't understand with a non-sequitur is even worse.

Posted by: sold2u | February 27, 2011 4:21 PM | Report abuse

Honestly, your constant bashing and hammering of Daniels is becoming very predictable and irritating.

Posted by: Leye | February 28, 2011 7:23 AM | Report abuse

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